As state ownership of private firms grows, morphs, and globalizes, states increasingly channel their influence through the financialized markets. The ensuing merger of the state’s commercial and sovereign roles suggests that state ownership is, again, becoming a vector of sovereign authority. This chapter analyzes the international legal system that has developed around surging state ownership. It suggests that the legal construction of distinctive “shareholder identities” in international economic law plays a key role in this complex regulatory matrix. Specifically, the chapter focuses on how arbitral tribunals adjudicating claims arising from international investment treaties use attribution, a doctrine of customary international law, in creating, maintaining, and disciplining state shareholders. Arbitral tribunals use the analytical category of the state shareholder in order to delineate and construct state and company identities and to understand the economic, political, and legal implications of those identities in the the global economy. Accordingly, the interactions between substantive international economic law and the law of state responsibility form important, but underappreciated, elements of this constitutive process, which comes to affect the institutional design of state shareholding and disincentivize hands-on control over state-owned entities.

Just before the start of the First World War, Robert Millikan, professor of physics at the University of Chicago and a specialist in electron theory, travelled to Germany to present an academic paper. A few years earlier, in 1905, the scientist Albert Einstein had proposed a linear relationship between the wavelength of light and the maximum velocity of electrons emitted from irradiated metal. Einstein was developing quantum theory – and Millikan was adamant that he was wrong.

While visiting Dresden Millikan was introduced to a young researcher who had just completed his PhD. The young man was South African and could thus speak English – which is probably why he was asked to show Millikan around campus. They also shared a research interest, as the young researcher was also working on Einstein’s theory.